The Canadian dollar has dropped after trading at record highs that had not been seen in the last three decades, it has been reported.

According to Bloomberg, the currency dipped to 99.53 US cents in Toronto after touching $1.0064 last week.

The fall came after David Dodge, Bank of Canada (BoC) governor, said the currency moved "sharply" above the 93 to 95 US cents the institution uses as assumed trading range, the news agency reports.

Bank of America Corp senior currency strategist John Rothfield suggested the risk is that if the BoC considers the currency's gains in its decision over monetary policy, it may "shift [its] stance to an easing bias".

He told Bloomberg "a bit of underperformance" could be expected in the currency.

Meanwhile, a new report by the Bank for International Settlements (BIS) has shown that traditional foreign exchange transactions have seen turnover increase by 71 per cent over the last three years.

In its Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity 2007, the BIS found "unprecedented" turnover growth to $3.2 trillion.

Particularly strong growth was revealed in FX swap turnover, which increased by 82 per cent this April.